JSM Financial: Hedge funds unhappy over Germany’s decision to ban some naked short selling.

May 19, 2010 - PRLog -- A recent move by the German government to curb the activities of speculators, and specifically hedge funds which are blamed in part for the global economic crisis , has JSM Financial  was informed, led to anger from hedge funds.

"I think it's ridiculous," said a managing partner at a leading hedge fund firm which specialises in investing in credit default swaps. "All it proves is how scary it is to have people who are unsophisticated in ... financial markets imposing regulations on products they don't understand."

The new German legislation bans naked shorts in selected financial stocks and euro-based bonds, as well as related transactions in credit default swaps, which came to the fore as a result of Greece’s current debt crisis, although hedge funds insist that they accounted for less than one fifth of activity in Greek sovereign credit default swaps, JSM Financial has learned from reports.

A source at a top London based hedge fund cautioned that the move may create, rather than lessen, dislocation in financial markets.

"This could be very frightening for everyone. Once you start interfering with the markets it leads to dislocation," JSM Financial believes he added. "If there's just soundbite politics ... and no real co-ordination it's very unsettling."

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